Western Digital 2007 Annual Report Download - page 63

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Amortization expense for assets under capital lease was $14 million, $5 million and $4 million for the years ended
June 29, 2007, June 30, 2007, and July 1, 2005, respectively. Accumulated amortization on machinery and equipment
recorded under capital leases was $20 million and $10 million as of June 29, 2007 and June 30, 2006, respectively.
Note 3. Short-term Borrowings and Long-term Debt
Short-term borrowings and long-term debt consisted of the following as of June 29, 2007 and June 30, 2006 (in
millions):
2007 2006
Term loan ................................... $— $25
Capital lease obligations (Note 4) ................... 22 19
Total debt ................................... 22 44
Less amounts due in one year ...................... (12) (25)
Long-term debt.............................. $10 $19
Line of Credit
The Company maintained a $125 million credit facility (“Senior Credit Facility”) with a termination date of
September 20, 2009. The facility provided for a revolving credit line (subject to outstanding letters of credit and a
borrowing base calculation) and a term loan. The term loan was paid in full as of March 30, 2007, a letter of termination
was submitted for the Senior Credit Facility on June 28th, 2007, and termination was finalized during the first quarter of
2008.
Note 4. Commitments and Contingencies
Lease Commitments
The Company leases certain facilities and equipment under long-term, non-cancelable operating and capital leases.
The Company’s operating leases consist of leased property and equipment that expire at various dates through 2015.
Rental expense under these operating leases, including month-to-month rentals, was $15 million, $16 million and
$16 million in 2007, 2006 and 2005, respectively. The Company’s capital leases consist of leased equipment. These leases
have maturity dates through July 2009 and interest rates averaging approximately 5.9%. Future minimum lease
payments under operating and capital leases that have initial or remaining non-cancelable lease terms in excess of one year
at June 29, 2007 are as follows (in millions):
Operating Capital
2008 ................................... $11 $13
2009 ................................... 10 10
2010 ................................... 10 —
2011 ................................... 6 —
2012 ................................... 2 —
Thereafter................................ 5 —
Total future minimum payments ............. $44 $23
Less: interest on capital leases ................ (1)
Total principal payable on capital leases......... $22
57
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)